Interim Results
Montpellier Group PLC
6 June 2002
CHAIRMAN'S STATEMENT
I am pleased to report that both turnover and profits before tax are up 80%
compared with the corresponding period last year, and that the Group continued
to make further excellent progress in the last six months. The recent
acquisition of Union Investment Management Limited reflects the Group's strategy
of extending its involvement in the investment sector. The YJL Construction
Division is, at £398m, registering its highest ever order book.
Financial Review
Profit before tax for the six months to 31 March 2002 was £2.7m (2001: £1.5m) on
turnover of £217.5m (2001: £116.7m). Earnings per share were 3.9p (2001: 2.3p)
with the net asset value per share increasing to 42.0p (2001: 35.0p).
Cash Review
The Group has invested significant funds in the build up of its investment
activities. Although these assets are to a large extent of a liquid nature,
these investments have reduced the cash balance of the Group. Further, a
significant investment has been made in the Cornhill property in which the Group
now has its central functions.
Net debt in the Group's balance sheet is £10.1m (2001: net cash £3.7m). The
movement in cash is partly due to the anticipated outflow from Allenbuild in
line with forecasts at the time of acquisition.
Acquisitions and Investments
During the first half of the year the Group made the following acquisitions and
investments for cash
£m
Acquisitions
Completion of VHE plc 3.7
Union Investment Management Limited 0.6
Freehold of 39 Cornhill, London 4.5
Investments
Cape PLC 0.9
Bullough PLC 2.7
Jarvis Porter Group PLC 2.7
The 600 Group PLC 1.3
Other shareholdings 1.1
17.5
The balance of the cost of 39 Cornhill was financed in April by the draw down of
an £8.3m loan repayable over a period of up to ten years. The loan is secured
against the property with recourse to the Group only in respect of interest.
Dividend
I am delighted that for the first time since 1991, the Group is returning to the
payment of an interim dividend. The interim dividend of 0.5p per Ordinary Share
will be paid to shareholders on the register on 14 June 2002, payable on 15 July
2002.
It is our intention to maintain a steady growth in dividends to shareholders
financed from increased profits. We believe that this strategy, together with a
solid asset base, will enhance shareholder value.
Construction Division - YJL plc
The acquisitions made in the Summer of 2001, Allenbuild and VHE, are trading
profitably and have been successfully integrated. The current construction
market place remains buoyant for our Construction Division which now has added
confidence due to the number of long term relationships with our clients. This
has resulted in a strong forward order book now standing at £398m (2001:£231m)
Property Division - Cheltenham Land Company Limited
It is encouraging to note that, in addition to managing the Group's property
portfolio, the Property Division has become increasingly involved in the
provision of advice to external third parties. They are involved in five such
projects at the current time, ranging from basic fee earning projects to profit
sharing joint ventures.
A number of sales were successfully achieved in the six months including the
disposal of the retail shopping centre at Grantham.
Various important planning applications are progressing well and the Division
will contribute both to profits and cash generation over the next eighteen
months.
The Group acquired the freehold of 39 Cornhill, a building in the City of
London. Montpellier will continue to occupy part of the property and will
sub-let the balance.
Investment Division - Union Investment Management Limited
On 27th March, the Group acquired, at net book value, Union Investment
Management which has the benefit of regulatory approval to carry on corporate
finance and investment business. The Union name has been established in the
City since 1885 and Union's network of contacts in corporate finance and
investments will assist Montpellier to achieve the intended growth of its
Investment Division.
During the last six months, the Investment Division has acquired substantial
holdings in Cape (29.9%), Bullough (29.86%), Jarvis Porter (26.6%) and 600 Group
(4.9%). It has also recently announced the purchase of a 17.37% holding in
Walker Greenbank.
Union is also in discussions with a number of parties with regard to the
provision of corporate advice services which is expected to produce substantial
fee income in the short to medium term.
Share Capital
At the Extraordinary General Meeting held on 27 March 2002 the shareholders
approved the issue of 17,461,834 new ordinary shares of 10p at a value of 37p.
This increased the equity of the Company by £6.5m.
Prospects
The trading for the first half of the year was in line with management's
expectations and your Board is confident that this will continue for the second
half of the year. The three strategic business streams of construction, property
and investment are well placed to take advantage of opportunities that will
arise in the future.
MONTPELLIER GROUP PLC
Group Profit and Loss Account
for the six months ended 31 March 2002
Notes Six months ended Year ended
31 March 30 September
Restated Restated
2002 2001 2001
£000 £000 £000
Turnover: Group and share of joint
ventures' turnover 218,497 118,726 311,917
Less share of joint ventures' turnover -
continuing operations (1,038) (2,035) (2,156)
Continuing operations 217,459 116,691 297,951
Discontinued operations - - 11,810
Group turnover 1 217,459 116,691 309,761
Cost of sales (198,392) (107,341) (282,219)
Gross profit 19,067 9,350 27,542
Other operating income 199 1,510 557
Administrative expenses (16,760) (9,574) (25,331)
Group operating profit 2,506 1,286 2,768
Income from joint ventures - continuing
operations - 137 -
Share of associates' operating profit / 110 (386) -
(loss)
Continuing operations 2,616 1,037 3,944
Discontinued operations - - (1,176)
Total operating profit including share of
joint ventures and associates 2,616 1,037 2,768
Profit on sale of fixed assets 59 379 637
Loss on disposal of discontinued operations - - (101)
Profit on ordinary activities before
interest and taxation 2,675 1,416 3,304
Net interest receivable 201 97 230
Share of associates' net interest payable (139) - -
Profit on ordinary activities before
taxation 2,737 1,513 3,534
Taxation (payable) / receivable on ordinary
activities (146) 52 142
Share of associates' taxation (30) - -
Profit before minority interests 2,561 1,565 3,676
Minority interests (147) - (41)
Profit for the period before dividend 2,414 1,565 3,635
Dividend (392) - (609)
Profit for the period 2,022 1,565 3,026
Basic and diluted earnings per Ordinary
Share 2 3.9p 2.3p 5.4p
Group Statement of Total Recognised Gains and Losses
Notes Six months ended Year ended
31 March 30 September
Restated Restated
2002 2001 2001
£000 £000 £000
Profit for the period 2,414 1,565 3,635
Exchange movements in reserves (91) (64) 384
Total recognised gains and losses relating
to the period 2,323 1,501 4,019
Prior year adjustment 4 104 - -
Total recognised gains since last annual
report 2,427 1,501 4,019
MONTPELLIER GROUP PLC
Group Balance Sheet
at 31 March 2002
Notes 31 March 30 September
Restated Restated
2002 2001 2001
£000 £000 £000
Fixed assets
Intangible assets:
Goodwill 1,735 693 2,018
Negative goodwill - - (946)
Tangible assets 23,075 6,429 12,329
Investments 30 611 30
Investments in joint ventures:
Loans to joint ventures 1,710 7,705 1,448
Share of gross assets 20,957 22,130 20,877
Share of gross liabilities (15,795) (16,480) (15,881)
6,872 13,355 6,444
Interests in associated undertakings 11,843 - -
Negative goodwill (6,990) - -
4,853 - -
36,565 21,088 19,875
Current assets
Stocks and work in progress 19,968 11,458 25,730
Debtors: due after more than one year 1,781 2,141 2,594
due within one year 90,987 47,379 89,065
Current asset investments 6,576 3,431 3,285
Cash at bank and in hand - 10,381 18,268
119,312 74,790 138,942
Creditors: amounts falling due within one
year (122,433) (70,221) (129,450)
Net current (liabilities) / assets (3,121) 4,569 9,492
Total assets less current liabilities 33,444 25,657 29,367
Creditors: amounts falling due after more
than one year
Long term debt (524) (917) (390)
Other creditors - (80) (860)
(524) (997) (1,250)
Net assets 32,920 24,660 28,117
Share capital 3 7,836 6,809 6,089
Share premium account 5,781 1,066 1,066
Revaluation reserve 73 393 73
Capital reserve 1,847 1,166 1,846
Profit and loss account 4 17,383 15,226 15,451
Equity shareholders' funds 32,920 24,660 24,525
Minority interests - - 3,592
32,920 24,660 28,117
MONTPELLIER GROUP PLC
Group Statement of Cash Flow
for the six months ended 31 March 2002
Six months ended Year ended
31 March 30 September
Notes 2002 2001 2001
£000 £000 £000
Net cash (outflow) / inflow from operating 5
activities (4,050) (8,405) 1,388
Returns on investments and servicing of
finance
Net interest received 254 97 188
Net cash inflow from returns on investments
and servicing of finance 254 97 188
Taxation
Corporation tax paid - (630) (1,003)
Capital expenditure and financial
investment
Net (purchases) / sales of tangible fixed
assets (4,707) 1,296 (1,701)
Net (purchases) / sales of current asset
investments (4,540) 1,231 3,202
Acquisition of own shares - (727) (2,730)
Investments in and movements on loans to
joint ventures (262) 1,762 1,769
Net cash (outflow) / inflow for capital
expenditure and financial investment (9,509) 3,562 540
Acquisitions and disposals
Payments to acquire subsidiary undertakings (4,287) - (5,652)
Payments to acquire associated undertakings (3,571) - -
Cash acquired on acquisition of - - 12,838
subsidiaries
Receipt from sale of business - - 11
Net cash (outflow) / inflow from
acquisitions and disposals (7,858) - 7,197
Equity dividends paid to shareholders (609) - -
Cash (outflow) / inflow before use of
liquid resources and financing (21,772) (5,376) 8,310
Management of liquid resources
Decrease / (increase) in short-term
deposits with banks 3,742 (5,000) 2,258
Financing
Movement in short-term borrowings (4,533) (430) (5,568)
Movement in long-term borrowings 134 386 225
Finance lease payments (270) - (143)
(4,669) (44) (5,486)
(Decrease) / Increase in cash during the (22,699) (10,420) 5,082
period
MONTPELLIER GROUP PLC
Notes to the Accounts
for the six months ended 31 March 2002
Note 1 Segmental analysis
Six months ended Year ended
31 March 30 September
2002 2001 2001
£000 £000 £000
Construction 211,290 115,321 307,016
UK Developments 4,343 796 1,677
USA Developments 2,864 2,609 3,224
Turnover: Group and share of joint ventures 218,497 118,726 311,917
Less: Share of USA joint ventures' turnover 1,038 2,035 2,156
217,459 116,691 309,761
Note 2 Earnings per Ordinary share
The earnings per Ordinary share is based upon the profit for the Group of
£2,414,000 (2001: March profit of £1,565,000; September profit of £3,635,000)
divided by the weighted average of Ordinary shares of 61,371,522 (2001: March
69,625,066; September 67,602,684) in issue over the respective periods.
The cost of a number of the share option schemes outstanding during the period
were below the average market value of the Company's shares hence the options
have a dilutive effect on the Earnings per Ordinary share calculation.
Note 3 Share capital
Six months ended Year ended
31 March 30 September
2002 2001 2001
£000 £000 £000
Authorised:
100,000,000 (2001: March and September 88,784,949)
Ordinary shares of 10p each 10,000 8,878 8,878
10,000 8,878 8,878
Allotted, called up and fully paid:
60,893,878 (2001: March 68,090,780 and September 6,090 6,809 6,089
60,888,538) Ordinary shares of 10p each
To be issued:
17,461,834 (2001: March and September nil)
Ordinary shares of 10p each 1,746 - -
7,836 6,809 6,089
Changes in share capital
A total of 17,467,174 10p Ordinary shares have been issued since 1 October 2001.
Of these, 17,461,834 were issued on 15 April 2002 at a price of 37p as a part
of the consideration in respect of the purchase of the Union plc building at 39
Cornhill, London EC3V.
The transaction was recommended by the Board and approved by the shareholders at
an EGM on 27 March 2002 and has been accounted for accordingly. 39 Cornhill was
purchased from the Union Discount Company Limited which is 100% owned by
Forvaltnings AB Browallia, which is the holding company of a major shareholder
in Montpellier Group plc.
The remaining shares that were issued relate to share option schemes and were
allotted during the six month period ended 31 March 2002.
Note 4 Prior year adjustment
The prior year adjustment relates to the implementation of FRS19 Deferred Tax.
The adoption of FRS19 has resulted in a deferred tax asset of £919,000 (2001:
March £828,000; September £880,000) and an increase in the profit and loss
account of £919,000 (2001: March £828,000; September £880,000). The increase in
the tax credit for the period is £39,000 (2001: March £52,000; September
£104,000).
Note 5 Net cash (outflow) / inflow from operating activities
Six months ended Year ended
31 March 30 September
2002 2001 2001
£000 £000 £000
Operating profit 2,506 1,423 2,768
Depreciation 648 493 1,036
Net amortisation of goodwill (1,286) 77 920
Exchange gains - - (7)
Income from joint ventures - (137) -
Decrease / (Increase) in stocks and work in progress 5,387 (758) (12,172)
Increase in joint venture investments - - 7,252
Profit on sale of fixed assets (70) - (171)
Profit on sale of current asset investments (93) (1,510) (836)
(Increase) / Decrease in operating debtors and (344) (9,082) 670
prepayments
(Decrease) / Increase in creditors and accruals (10,625) 1,089 984
Exchange movement on joint ventures (173) - (92)
Other non-cash movements - - 1,036
Net cash (outflow) / inflow from operating activities (4,050) (8,405) 1,388
Note 6 Basis of preparation
a) The accounts for the six months ended 31 March 2002 and the equivalent period
in 2001 have not been audited by the company's auditors. They have been
prepared in accordance with applicable accounting standards consistent with the
accounting policies set out in the 2001 Annual Report, with the addition of
FRS19 Deferred tax.
b) The abridged information in this statement relating to the year ended 30
September 2001 is derived from full accounts upon which the auditors issued an
unqualified opinion and which have been delivered to the Registrar of Companies.
These accounts have been restated for the effect of FRS19 Deferred tax (note 4).
This interim statement is being sent to all shareholders and is also available
upon request from the Company Secretary, Montpellier Group plc, 39 Cornhill,
London EC3V 3NU.
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